Asian chip market to hit US$160B

Led by China, India and emerging markets Thailand and Vietnam, Asia's semiconductor industry will grow 6.4 percent in 2008, says Gartner.
Written by Vivian Yeo, Contributor

The semiconductor industry is set to enjoy a year-on-year growth of 6.4 percent to reach US$160 billion in 2008, according to new forecast from Gartner.

In a statement Monday, the research house noted that by 2012, the Asia-Pacific semiconductor market will be worth US$203 billion. In 2007, market revenues registered US$150 billion.

Phillip Koh, research vice president of Gartner Asia-Pacific's semiconductor group, said the region "continues to increase its dominant share" of the global semiconductor market. Asia is tipped to grow nearly 40 percent faster than the worldwide market, which Gartner expects will expand by 4.6 percent this year to over US$285 billion.

"Continued growth in China, rapid growth in India and the emergence of new markets such as Vietnam and Thailand, are important contributors to the growth of the regional market," Koh noted. "These new markets provide excellent business potential for firms in the semiconductor supply chain."

In the longer term, he added, the region will continue to attract foreign investment with its low manufacturing costs and huge domestic demand.

However, Koh also noted that a slowdown in consumer spending and the threat of escalating oil prices could hold back semiconductor growth over the forecast period in the Asia-Pacific market.

John Barber, research director at Gartner, reported that "selected devices in specific electronic equipment types will post much higher growth", despite a single-digit growth forecast for the global market over the next five years.

"Home consumer products like Blu-ray discs, IP set-top boxes and home networking equipment will create wide-ranging demand for semiconductors," Barber said, adding that mobile devices such as the Apple iPhone and the Nokia N95 are capable of creating wide-ranging demand for semiconductors.

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